The globalized economy is a colossal Ponzi Scheme in which the vast majority survive on the bread crumbs falling off the table. The possibility of 7 billion people achieving a consumption-oriented lifestyle is zero, so the World Bank conveniently set the poverty line at $1.25/day to legalize global slavery. As long as someone else's children are doing the suffering, it's "all good". Post-2008, this illusion was extended merely by plundering all future generations.

Sunday, July 31, 2016

They're a mass delusion propelled by greed and belief in a free lunch...The definition of a Ponzi scheme is insolvency disguised by liquidity. By total coincidence, Central Banks use liquidity to disguise insolvency. Bernie Madoff is wondering why he's the one in jail. The fact that Central Banks are willing to buy ever-more financial assets doesn't change their underlying value. Paying a trillion dollars for a brick doesn't make the brick worth a trillion dollars...

The Bank of Japan already owns over half of all ETF shares, and the the majority of Japanese Government Bonds. On Friday they announced an expansion of their ETF buying program. The Japanese Nikkei was up .5% on the news and the USDJPY tanked:

Japan and Europe with the combined Central Bank balance sheet (red).

Contrary to Idiocratic belief, what some fucking moron paid for a stock yesterday has no bearing on what it's worth today...

Post-2008, the Idiocracy chose fake-believe over solvency, because the status quo is in self-destruct mode. Along with the posers who believe in it...Obama's pseudo-recovery was all borrowed moneyGDP less Deficit:

Saturday, July 30, 2016

Tech moon shots and semiconductor acquisitions. Wondering why the Nasdaq has been outperforming in the past month? Wonder no more...

Semiconductors are the quintessential cyclical industry that historically leads in the early part of the economic cycle, peaking early. Recently they went parabolic due to several

mergers and acquisitions...

But first, a primer on bubbles:

MarketWatch: Some economists argue that the economy has just been bubble after bubble and that we’re doomed to repeat this cycle.

Greenspan: Well, I agree with that...what we’re dealing with is that both a necessary and sufficient condition for the emergence of a bubble is a protracted period of stable economic activity at low inflation. So it is a very difficult policy problem. I do believe that central banks that believe they can quell bubbles are living in a state of unrealism.

One chip-maker that usually does peak late is video game graphics company Nvidia:

Texas Instruments

Takeover

Takeover

Of course there's no bigger bubble than this one...Consumer staples P/E Ratio:

Copious dunces or reality. Choose carefully...The first major Yuan devaluation was one year ago, meaning an entire year of extreme risk has been ignored.The S&P is trading in the narrowest range in 40 years, while diverging from every other risk asset on the planet.MW: July 29, 2016The S&P 500 Hasn't Done This In 40 Years. And it's BullishIt's bullish when stocks ignore risk. What else could it be?